1. SHARE-ISRAEL PROJECT Survey of Health, Aging and Retirement Among Israeli 50+ Conference on: First Longitudinal Results from the First Two Waves: 2005/06 and 2009/10 Van leer Jerusalem Institute 17.10.2012 Economic Welfare and Employment Patterns Leah Achdut, Ruppin Academic Center and Van Leer Institute Rita Troitzky, Sami Shamoon Academic College Aviad Tur-Sinai, Central Bureau of Statistics and Ben-Gurion University

2. Background: Israel Between the Two Waves (2005 - 2010) 2004 - 2008,a period of economic growth. The economic crisis in Israel (mid 2008 - mid 2009) was relatively moderate, so the rise in unemployment. The recovery was accompanied by an increase in jobs. The 2001 -2003 recession was followed by reforms in the pension and welfare policies. Pension reforms: (a) postponing the age of retirement in 2 years in a short period (August 2004 - January 2010). (b) The transition to DC plans administrated by private bodies was almost completed (c) mandatory occupational pension (2008).

3. Background: Israel Between the Two Waves (2005 - 2010) Welfare policy: more restricted eligibility criteria for benefits and less generous benefits for the people in the age of work. Tax reforms: substantial decrease in the personal income tax (as well as in cooperative tax) A significant rise in the prices of housing (since 2008) The recovery of the stock market in 2009 -2010

4. Some Comments on the Database Creating the longitudinal data (the Panel). Building employment history for each interviewee The longitudinal analysis is based on the Wave 1 weights. The period between the two waves: 37 -58 months, on average- 4 years. Computing for each interviewee his retirement age according to the new law (the eligibility age for NII old - age benefit and for pensions). Computing the net incomes for Wave 1 in order to allow comparison with wave 2 (simulating of the personal income tax on various types of income and of the social security contributions).

5. Labor Force Participation Rates: Men, Wave 1 (2005/06) and Wave 2 ( 2009/10)

6. Labor Force Participation Rates: Women, Wave 1 (2005/06) and Wave 2 ( 2009/10)

7. Logistic analysis of probability of being in Labour Force, Women (Odds ratio of age), Wave1 Sig at 99% Sig at 95% Sig at 90% No Sig.

8. Logistic analysis of probability of being in Labour Force, Women (Odds ratio of age), Wave2 Sig at 99% Sig at 95% Sig at 90% No Sig.

9. Actual Age of Retirement by Years of Retirement (Panel) Average Actual Age of Retirement Years of retirement WomenMenAll 60.161.460.41990-2004 60.361.260.81995-2004 60.161.260.72000-2004 61.063.762.82005-2010

10. Transitions Out of Employment to Different Labour Market Status (wave 2) - Men 50 - 67 Age Group (Panel) Labour Market Status – Wave2 TotalOther* Retired or disabled In Labour Force Labour Market Status – Wave1 1001.320.678.1 In Labour Force 1000.786.712.6 Retired or disabled 10011.852.935.3Other * Homemakers, Others and Unemployed out of labour force

11. Transitions Out of Employment to Different Labour Market Status (wave 2) - Women 50 - 67 Age Group (Panel) Labour Market Status – Wave2 TotalOther* Retired or disabled In Labour Force Labour Market Status – Wave1 1007.223.269.6 In Labour Force 10016.274.69.2 Retired or disabled 10074.713.212.1Other * Homemakers, Others and Unemployed out of labour force

12. Percentage in paid work in Wave1 and Wave2, by age in Wave1 and sex (Panel) Age in Wave1 All65+60-6455-5950-54 %%% Men 46.217.962.270.980.9 In paid work in Wave1 40.416.944.163.974.0 In paid work in Wave2 -12.6-5.6-29.1-9.9-8.5 % fall in emp. rate Women 36.18.337.256.866.1In paid work in Wave1 31.29.833.146.454.7In paid work in Wave2 -13.618.1-11.0-18.3-17.2% fall in emp. rate

13. Percentage of those in paid work in Wave1 who are not in paid work in Wave2, by age band and sex

14. Self-reported economic status in Wave2 of those who are in paid work in Wave1 but are not in paid work in Wave2, by age band and sex

15. Percentage of those in paid work in wave 1 who are not in paid work in wave2, by age band, sex and wave1 self-reported health

16. Work status in wave2 of those in full-time paid work in wave1, by age band and sex

19. Work status in wave2 of those in part-time paid work in wave1, by age band and sex

20. Probit Regression: Multivariate analysis of probability of Leaving Labour Force, Men (Marginal Effect) Job Characteristics & Health Variables Sig at 99% Sig at 95% Sig at 90% No Sig.

21. Probit Regression: Multivariate analysis of probability of Leaving Labour Force, Men (Marginal Effect) Age Sig at 99% Sig at 95% Sig at 90% No Sig.

22. Probit Regression: Multivariate analysis of probability of Leaving Labour Force, Women (Marginal Effect) Job Characteristics & Health Variables Sig at 99% Sig at 95% Sig at 90% No Sig.

23. Probit Regression: Multivariate analysis of probability of Leaving Labour Force, Women (Marginal Effect) Age Sig at 99% Sig at 95% Sig at 90% No Sig.

24. Main Findings Increased labor force participation rate of persons aged 50 and over, by gender – between 2005/6 and 2009/10. Actual retirement age for men (women) who retired in 1990-2004 was 61.4 (60) years, while in 2005-2010 it was 63.7 (61) years, respectively. 87 percent of the men who were retired or unemployed in the first wave were to be on the same status in the second wave, while about 13% returned to be employed. 78 percent of the men who defined themselves as employees on the first wave were to be on the same position in the second wave, while about 21% had retired. Probability of leaving labour force depends on the morbidity level (positive), job status (negative) and the quality of work required. Probability of leaving labour force is greater for men aged 64-65 and for women aged 62-65.